Ford closed down almost 7.5% on Monday.
The bloodletting was swift: the company basically fell off a cliff at about 3 p.m.
The stock closed at $15, after ending Friday at $16.
Concerns about Ford's losses in Europe and South America drove the sell off. Bloomberg reported that Ford expects to lose a combined $2.2 billion in both markets this year.
This article appeared on the businessinsider.com Internet site at 4:10 p.m. EDT on Monday afternoon---and today's first story is courtesy of Roy Stephens.
The U.S. dollar has seen an impressive strengthening in the past three months. That is a fact that has many analysts, including me, scratching their heads.
We have seen the U.S. dollar strengthen across the board against nearly all currencies of the world. The worst of the currencies in the last month has been the Japanese yen. Just a few weeks ago I wrote to you about the insanity that Prime Minister Shinzo Abe has unleashed upon Japan.
The United States is following in Japan's footsteps and yet we see the U.S. dollar soar.
Manipulation in gold prices along with weak demand for commodities has crushed the Canadian dollar. The temporary weakness in China's growth has pushed the Australian dollar down.
This news item was posted on the moneynews.com Internet site at 8:04 a.m. EDT last Wednesday---and I thank Brad Robertson for sharing it with us.
Investors are scrambling for safe assets ahead of the end of the financial quarter, with the scrum for securities exacerbated by the Federal Reserve's testing of a key financing tool for an eventual tightening of policy.
Yields on short-term Treasury bills, viewed as ultra-safe securities, have dipped below zero as the assets attracted heavy buying in the run-up to the end of the third quarter.
Negative yields on the securities mean that money market funds and other big investors are effectively willing to pay the US government for holding their cash over the end of the financial period.
These above three paragraphs are all there is that's posted in the clear in this story that appeared in The Financial Times of London yesterday---and it showed up in a GATA release yesterday. The FT headline reads "Fed 'Repo' Tests Drive Scramble for Safety".
U.S. Senate Banking Committee members are calling for hearings and full investigation into alleged ties between Federal Reserve supervisors and officials at Goldman Sachs, a bank the Fed was supposed to be policing.
Congress must hold “oversight hearings on the disturbing issues” raised by the secretly recorded conversations between the Fed and Goldman officials, Senator Elizabeth Warren (Mass, D) said on Friday. Portions of recordings from 2011 and 2012 were recently made public, apparently showing unwillingness by some Fed supervisors to both demand information from Goldman Sachs and criticize its conflict-of-interest policy.
“When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy,” Warren said in an emailed statement to Reuters, adding that the issues raised by the whistleblower should be addressed when Congress returns in November.
This story showed up on the Russia Today website at 7:37 p.m. Moscow time on their Saturday evening, which was 11:37 a.m. EDT---and I thank Harry Grant for sharing it with us.
The Federal Reserve Bank of New York said it “categorically rejects” allegations made by a former examiner at the Fed bank that her colleagues there were too deferential to the institutions they regulated.
“The New York Fed works diligently to execute its supervisory authority in a manner that is most effective in promoting the safety and soundness of the financial institutions it is charged with supervising,” the regional Fed bank said in a statement posted on its website Friday.
The radio program “This American Life” today released the transcript of a broadcast that includes excerpts of conversations it said were secretly recorded by Carmen Segarra, the former bank examiner, with some of her colleagues and her supervisor.
The transcript includes excerpts of discussions between Segarra and another official, Michael Silva, who was then a senior Fed supervisor with oversight responsibilities for Goldman Sachs Group Inc.
This story appeared on the moneynews.com Internet site at 1:26 p.m. EDT on Friday---and it's courtesy of West Virginia reader Elliot Simon.
With Massachusetts' freshman liberal Democratic senator, Elizabeth Warren, calling for hearings on the Federal Reserve's subservience to big investment banks, The New York Sun muses that Kentucky's libertarian-leading freshman Republican senator, Rand Paul, could join her in a coalition to pass legislation to audit the central bank, and particularly its New York office.
The Sun's editorial is headlined "Audit the New York Fed"---and it was posted on their Internet site on Saturday. I found this item on the gata.org website---and I thank Chris Powell for wordsmithing the above paragraph of introduction.
For several days we had heard a persistent rumor, that one of the most famous members of the New York Fed's Markets Group, also known as the Plunge Protection Team, Kevin Henry was moving to the HFT capital of the world, Chicago. We refused to believe it because, let's face it, when the trading desk on the 9th floor of Liberty 33 needs to get its hands dirty in stocks, it simply delegates said task using just a little more than arms length negotiation, with the world's most levered HFT hedge fund: Ken Griffin's Citadel. Why change the status quo.
And then, it turned out to be true because as the Chicago Fed announced just a few short days ago:
The Markets Group at the Federal Reserve Bank of New York manages the size and composition of the Federal Reserve System’s balance sheet consistent with the directives and the authorization of the Federal Open Market Committee (FOMC), supports debt issuance and debt management on behalf of the U.S. Treasury, provides foreign exchange services to the U.S. Treasury and provides account services to foreign central banks, international agencies and U.S. government agencies.
Markets Group is establishing a presence at the Federal Reserve Bank of Chicago and has openings for both experienced professionals and recent graduates.
So instead of interacting with the HFT momentum ignition algos using the microwave line of sight towers from NY all the way to Chicago, the NY Fed has decided it needs to be present on location in the windy city to buy up every ES contract and reverse the selling momentum when the day of reckoning finally hits.
This long article appeared on the Zero Hedge website at 11:48 a.m. EDT on Sunday morning---and I thank reader M.A. for sending it along. You don't have to read it all to get the point being made.
One might think that by now even Americans would have caught on to the constant stream of false alarms that Washington sounds in order to deceive the people into supporting its hidden agendas.
The public fell for the lie that the Taliban in Afghanistan are terrorists allied with al Qaeda. Americans fought a war for 13 years that enriched Dick Cheney’s firm, Halliburton, and other private interests only to end in another Washington failure.
The public fell for the lie that Saddam Hussein in Iraq had “weapons of mass destruction” that were a threat to America and that if the US did not invade Iraq Americans risked a “mushroom cloud going up over an American city.” With the rise of ISIS, this long war apparently is far from over. Billions of dollars more in profits will pour into the coffers of the US military security complex as Washington fights those who are redrawing the false Middle East boundaries created by the British and French after WW I when the British and French seized territories of the former Ottoman Empire.
The American public fell for the lies told about Gaddafi in Libya. The formerly stable and prosperous country is now in chaos.
Always controversial, but never far off the mark, this essay by Paul showed up on his Internet site on Sunday sometime---and it's the first offering of the day from Roy Stephens. It's worth reading.
Lloyds Banking Group said it had dismissed eight people and recouped L3 million in bonuses after finding they had attempted to manipulate benchmark interest rates, as the long-running probe into rate-rigging continues to claim scalps.
The bank was criticised for "highly reprehensible" behaviour by the Bank of England in July after it became the first lender to be fined for rigging rates to cut the cost of a UK financial crisis rescue scheme, in effect costing the taxpayer millions of pounds.
It said on Monday that eight employees had been dismissed, pending their right to appeal, after an internal disciplinary process. Four other members of staff who had been suspended were cleared of wrongdoing and have returned to work.
The rest of this Financial Times story from Monday is subscriber protected---and I found it embedded in a GATA release yesterday. It's worth skimming.
A UK Conservative MP has defected to the UK Independence Party, formally resigning from the main ruling coalition party and prompting a by-election in his home constituency.
“I’m joining UKIP!” MP Mark Reckless announced to a standing ovation at the UKIP party conference, which took place in Doncaster on Saturday.
The 43-year-old Rochester and Strood MP, a former investment banker elected to the Commons in 2010, had previously denied rumours that he was going to “jump ship” and the announcement was sprung on the audience as an apparent surprise.
“These decisions are never easy. Mine certainly has not been. Many have been the sleepless nights when I have talked it over with my wife and have thought about the future of our children,” Reckless said.
This Russia Today story put in an appearance on their Internet site at 5:12 p.m. on Saturday afternoon Moscow time---and it's the second contribution of the day from Roy Stephens.
The Duke and Duchess of Cambridge, Princess Anne and the Duchess of Cornwall could also be hit by hefty bills by the tax, which would target everyone with a home worth more than £2million.
The likes of Buckingham Palace would not be taxed - as it is technically owned by the state - but Balmoral castle and Sandringham House would still leave the Queen with huge amounts to pay.
Tatler reported that Balmoral had been estimated to be worth up to £50million earlier this year, and if Sandringham were to fetch a similar fee, the Queen could be made to pay nearly £1million for the two homes - if they were both taxed at a rate of one per cent of their value over £2million, the Daily Express reports.
Labour has not yet released full details of the tax on the wealthy, which they say could raise an extra £1.3billion for the NHS.
This very interesting story showed up on the dailymail.co.uk Internet site at 1:00 a.m. BST on Sunday morning---and I thank reader 'h c' for finding it for us.View full GSD edition
France's public debt topped the symbolic level of €2.0 trillion for the first time, in the second quarter of the year, the national statistics agency INSEE said Tuesday.
The total national debt amounted to €2.023 trillion ($2.57 trillion), INSEE said, which represents 95.1 percent of gross domestic product (GDP). European Union rules limit debt to 60 percent of GDP.
Yep, the money printing will never stop. It either gets devalued to nothing, or is defaulted on. There is no other way. The above two paragraphs are all there is to this very brief AFP story that appeared on the france24.com Internet site at 9:05 a.m. Europe time this morning---and I thank South African reader B.V. for sending it my way in the wee hours of this morning. It's only three sentences long, so you should read it.
The European Central Bank will this week unveil details of its plans to inject cash into the moribund eurozone economy, even as analysts express doubt about the effectiveness of the measures.
Following its surprise rate cut last month, the ECB is not expected to announce any new policy moves at its regular monthly meeting on Thursday, held this time in the Italian city of Naples instead of its usual home venue in Frankfurt.
But financial markets are hoping that ECB president Mario Draghi will provide more details about the bank's contested liquidity programmes, notably its plans to buy asset-backed securities as a way of kick-starting lending in the 18 countries that share the euro.
And some ECB watchers will be listening out for any hints that the bank may embark on a much wider programme of so-called quantitative easing (QE) or the purchase of unlimited amounts of bonds, a policy already practiced by other central banks such as the US Federal Reserve and the Bank of England.
This AFP story showed up on the france24.com Internet site at 8:25 a.m. Europe time on Sunday morning---and I seem to remember posting a similar story from another source in my Saturday column. I thank South African reader B.V. for sharing it with us.
While the European Central Bank president says the exchange rate isn't a policy target, officials aren't secretive about their approval of the currency's almost 10 percent slide. The depreciation increases the cost of imports and boosts exporters' competitiveness, aiding the effort to revive inflation that data tomorrow will probably show is the weakest since 2009. A gauge of economic confidence published today slipped to the lowest since November.
The euro dropped from a 2 1/2-year high in May as officials unveiled a medley of stimulus measures, and consolidated below $1.30 when Draghi cut rates this month and signaled a desire to grow the ECB's balance sheet by as much 1 trillion euros ($1.3 trillion). Details of a plan to buy assets will probably come this week after the Governing Council meets in Naples, Italy.
"When Draghi mentioned expanding the size of the balance sheet, I think he was secretly thinking of the exchange rate," said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. "I'm sure he's happy to see that the euro has been going down. He's well aware that one important channel of policy transmission is the exchange rate."
This Bloomberg story, filed from Frankfurt, put in an appearance on their Internet site at 6:13 a.m. Denver time yesterday morning---and once again I found this article posted on the gata.org Internet site.
A "poisonous combination" of record debt and slowing growth suggest the global economy could be heading for another crisis, a hard-hitting report will warn on Monday.
The 16th annual Geneva Report, commissioned by the International Centre for Monetary and Banking Studies and written by a panel of senior economists including three former senior central bankers, predicts interest rates across the world will have to stay low for a "very, very long" time to enable households, companies, and governments to service their debts and avoid another crash.
The warning, before the International Monetary Fund's annual meeting in Washington next week, comes amid growing concern that a weakening global recovery is coinciding with the possibility that the US Federal Reserve will begin to raise interest rates within a year.
One of the Geneva Report's main contributions is to document the continued rise of debt at a time when most talk is about how the global economy is deleveraging, reducing the burden of debts.
This Financial Times story showed up on their website on Sunday---and it's posted in the clear in its entirety---and this is another item from the gata.org Internet site. The actual FT headline reads "Geneva Report Warns Record Debt and Slow Growth Point to Crisis". It, too, is worth reading.
Debt ratios in developing Asia have surpassed extremes seen just before the East Asian financial crisis blew up in the late 1990s and companies have borrowed unprecedented sums in dollars, leaving the region highly vulnerable to US monetary tightening.
Morgan Stanley said foreign debt in emerging Asia has soared from $300bn to $2.5 trillion over the last decade, creating the risk of a currency shock as the dollar surges to a four-year high and threatens to smash through key technical resistance.
"High dollar liabilities do not bode well for emerging markets. In Asia (excluding Japan), the credit-to-GDP gap has reached levels higher than 1997," it said.
The US bank warned clients that local lenders in Asia have relied increasingly on the wholesale capital markets - a little like Northern Rock before 2007 - allowing them to expand credit faster than deposit growth. This leaves them exposed if liquidity dries up.
This Ambrose Evans-Pritchard commentary appeared on the telegraph.co.uk Internet site on Monday morning at 5:10 a.m. BST---and my thanks to Roy Stephens for sending it.
China will start direct trading between the yuan and the euro tomorrow as the world’s second-largest economy seeks to spur global use of its currency.
The move will lower transaction costs and so make yuan and euros more attractive to conduct bilateral trade and investment, the People’s Bank of China said today in a statement on its website. HSBC Holdings Plc said separately it has received regulatory approval to be one of the first market makers when trading begins in China’s domestic market.
The euro will become the sixth major currency to be exchangeable directly for yuan in Shanghai, joining the U.S., Australian and New Zealand dollars, the British pound and the Japanese yen. The yuan ranked seventh for global payments in August and more than one-third of the world’s financial institutions have used it for transfers to China and Hong Kong, the Society for Worldwide International Financial Telecommunications said last week.
“It’s a fresh step forward in China’s yuan internationalization,” said Liu Dongliang, an analyst with China Merchants Bank Co. in Shenzhen. “However, the real impact on foreign exchange rates and companies may be limited as onshore trading volumes between yuan and non-dollars are still too small to gain real pricing power.”
This short Bloomberg article, co-filed from Hong Kong and Beijing, showed up on their website at 5:06 a.m. MDT yesterday morning---and I thank reader 'h c' for his second offering in today's column.
Pro-democracy protesters in Hong Kong defied volleys of tear gas fired by police, blocking streets and forcing some banks to close on Monday as they stood firm in the centre of the global financial hub on Monday.
Hong Kong’s government later said it had withdrawn riot police from the city’s streets as demonstrators apparently began to calm down.
The unrest, the worst in Hong Kong since China resumed its rule over the former British colony in 1997, sent white clouds of gas wafting among the world’s most valuable office towers and shopping malls as the city prepared to open for business.
Televised scenes of the chaos also made a deep impression on viewers outside Hong Kong, especially in Taiwan, which has full democracy but is considered by China as a renegade province which must one day be reunited with the Communist-run mainland.
This france24.com news story appeared on their website on Monday sometime---and it's also courtesy of Roy Stephens. Then there's this amazing piece on this issue headlined "Stunning Drone Footage Shows Just How Enormous The Hong Kong Protests Really Are". This 3-minute video clip is even more impressive than than the france24.com article. It's definitely worth watching. It's also the final contribution of the day from Roy Stephens, for which I thank him.
Rickards attended the Forex World Istanbul---and delivered a presentation on currency wars at the event last Friday. I found the opportunity to ask him a couple of questions following his book signing event. I am sharing this short interview and Rickards’ exclusive comments here.
EÖ - My first question is, what do you think about ‘Abenomics’ this historical money printing experiment taking place in Japan?
JR - Japan has been in depression since 1990 so it's a 25 year depression. Depressions cannot be solved with liquidity or monetary solutions. Depressions can be solved with structural solutions. You have structural problems so you need structural solutions. Through all this time Japan tried monetary solutions. They tried money printing, they tried lower interest rates, they tried stimulus but they could not make fundamental structural reforms for their economy. So that’s why they were not able to get out of the depression.
Abenomics will fail. It will fail unless they make structural solutions. But since they haven't, I expect their depression to continue and spread throughout the world.
This interview by Erkan Öz was posted on the Turkish website financialflood.blogspot.com.tr on Saturday---and it's definitely worth reading. Jim also has something to say about the BIS and the ongoing price management situation in gold as well. English is obviously not Erkan's first language, but you should be able to figure it out nonetheless. I thank Harold Jacobsen for bringing this to my attention---and now to yours.
1. John Embry: "Silver is the Cheapest Asset in the World Today" 2. James Turk: "Total Corruption in Global Markets---and Silver in Backwardation" 3. Richard Russell: "Financial Meltdown and Once in 600-Year Event"
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
Well-meaning conservative and libertarian groups beat the drum for something called "free markets." Liberal groups blame these "free markets" for many of the world's evils.
Here's the harsh reality neither side will tell you. There ain't no such thing as a "free market."
The free market ceased to exist more than 40 years ago. Nixon drove a stake through its heart by shutting down the Bretton Woods world monetary system, without which free markets cannot exist.
It cannot exist in its true form because the very money that is the foundation of our economy now is just pieces of paper: "legal tender for all debts public and private." Money's value is controlled not by the markets but by a federal agency, the Federal Reserve.
This right-on-the-money opinion piece put in an appearance on the marketwatch.com Internet site back on September 10---and it's another item that showed up in a GATA release late last night.
Republican Jeff Bell spent three decades in Washington working on policy and wrote a book promoting all aspects of social conservatism. But so far his campaign for the U.S. Senate has centered on just one issue: returning the United States to the gold standard.
It's an idea that his opponent, Democratic incumbent Cory Booker, dismisses as "defunct and debunked," which is pretty much how most economists seem to see it.
But a group of conservative thinkers pushing for the change is undaunted.
Bell and other supporters of the gold standard say it would be a way to keep prices stable. He says the current means of controlling prices -- near-zero interest rates from the Federal Reserve -- is making it hard for small businesses to get loans and expand. Bell says that's a major reason that the economy is growing slowly years after the Great Recession.
This ABC News story, filed from New Brunswick, N.J., was posted on their website at 7:23 p.m. EDT on Sunday evening---and it's another offering I found on the gata.org Internet site.
The Libertad is a Mexican coin that was first issued in 1981 in .999 fine gold and then in silver in 1982. Beginning in 1991, the Libertads became the only coins in the world that were issued in the convenient sizes of 1/20, 1/10, 1/4, 1/2, and 1 ounce—again, in both gold and silver. This made them very practical if they were to be used as currency.
But of course, gold and silver coinage has traditionally had a bit of a problem when either inflation or deflation is the norm in the world: a denominated face value. A century ago, a one-ounce U.S. Liberty gold coin had a face value of twenty dollars. Today, its scrap value alone is nearly 65 times that amount. So, as the value of precious metals changes from day to day, the face value of the coin becomes meaningless.
However, the Libertad, unlike most gold and silver coinage in the world, does not show a face value; it shows only a weight. It can therefore change in value daily, assuming that the Mexican government were to also create a standard by which the Libertad prices could be calculated each day as the prices of gold and silver fluctuate.
This very interesting commentary showed up on the internationalman.com Internet site yesterday---and parallels the decades worth of work that Mexican billionaire Hugo Salinas Price has been doing in this area. It's certainly worth reading.
Bullion Vault research director Adrian Ash notes that the fourth European Central Bank Gold Agreement takes effect today, extends for five years, and removes any limits on gold sales by the 21 signatories while acknowledging that "they do not have any plans to sell significant amounts of gold," because the limits contained in predecessor agreements had come to look silly, such sales having ended long ago.
Ash's commentary, along with a link to another story, is headlined "End of the Central Bank Gold Agreement"---and both of these article were embedded in a GATA release from yesterday---and both are very much worth reading.
Gokhran’s palladium reserves are a state secret and analysts try to guess the level each year but they are widely believed to have been depleted according to Reuters.
Gokhran was influential on global platinum group metals (PGMs) markets in the 1990s and 2000s, when its palladium stocks, accumulated during the 1970s and 1980s, came to the market, depressing prices.
Gokhran is the State Precious Metals and Gems Repository which is a state institution under the Russian Ministry of Finance. It is responsible for the State Fund of Precious Metals and Precious Stones of the Russian Federation. It is responsible for the purchase, storage, sale and use of precious metals, precious stones, jewellery, rocks, and minerals by the State Fund.
These are the only four paragraphs on this subject that appeared on the goldcore.com Internet site yesterday. However, some of Mark O'Byrne's other commentary is worth reading as well.
Singapore Exchange Ltd., Southeast Asia's biggest bourse operator, will start trading a kilobar gold contract next month as it joins other nations in the biggest consuming region in a push for new price benchmarks.
The wholesale contract for 25 kilograms of 99.99 percent purity will start trading at 8:15 a.m. on Oct. 13, according to a joint statement from the exchange, IE Singapore, the World Gold Council, and the Singapore Bullion Market Association. The group said in June that trading may begin as soon as September.
The Shanghai Gold Exchange started bullion trading in the city's free-trade zone on Sept. 18, while CME Group Inc. is planning a physically-delivered futures contract in Hong Kong in the fourth quarter as global demand shifts from the West to the East. Asia accounted for 63 percent of total consumption of gold jewelry, bars, and coins last year, with China overtaking India as the biggest buyer, according to the council.
This brief gold-related Bloomberg news item, filed from Singapore, appeared on their website at 3:00 a.m. MDT on Monday morning---and it's the second-last story of the day from that gata.org Internet site. Chris was a busy boy yesterday.
While Western financial news organizations and the World Gold Council keep reporting a decline in Chinese gold demand, gold researcher, but GATA consultant Koos Jansen writes that demand remains "extremely strong" and, as measured by withdrawals from the Shanghai Gold Exchange for the week ending September 19, even "astonishing."
This gold commentary appeared on the Singapore Internet site bullionstar.com at 4:50 p.m. local time on Saturday afternoon---and it's the last story of the day from the gata.org Internet site. I thank Chris Powell for wordsmithing the above paragraph of introduction. It's definitely worth reading---at least up until the point where your eyes start to glaze over.
We cannot emphasise more strongly that gold followers should ignore the mainstream media reports, based on Hong Kong gold export figures to mainland China, that Chinese gold demand has plummeted by anything between 30% and 50% this year. As we pointed out in an article last week, Hong Kong is now no longer the principal port of entry for gold into the Chinese mainland. When it was still so, gold exports into China were extremely high at the beginning of the year, but since then the Hong Kong figures have tailed off as China effectively opened up gold import routes through other entry points---notably Shanghai and Beijing---resulting in the Hong Kong net gold exports falling back month by month from a peak of 111 tonnes in February to a mere 21 tonnes in August. This is thus no longer an indicator of overall Chinese gold demand.
That this does not represent the overall Chinese picture is apparent from the withdrawals of physical gold from the Shanghai Gold Exchange (SGE). True these withdrawals are also down this year suggesting a more gradual slowdown in Chinese demand, NOT a precipitous fall as suggested by the mainstream media. However, recently SGE gold withdrawal figures have been particularly strong again – a fact apparently ignored by most gold commentators. Indeed the past four weeks’ withdrawals from the SGE have totalled over 170 tonnes – this suggests an annual rate of over 2,200 tonnes although weaker figures from March up until August will mean this level will not be reached for the 2014 calendar year, but it may well get much closer to last year’s 2,197 tonnes withdrawn from the SGE than previously estimated. We would suggest that this year’s figure may well get close to 2,000 tonnes given the lower gold price has been stimulating demand at a time of year when it is traditionally strong anyway. We can thus anticipate continuing demand at high levels and China maintaining its place as the world’s largest gold importer – even disregarding the assumed-probable additional gold imports to swell the country’s gold reserves.
This commentary by Lawrie is a follow-on to the Koos Jansen piece posted above it. This article was posted on the mineweb.com Internet site yesterday. It's also worth your while.
Macy's CEO Terry Lundgren said he was expecting a rebound this year.
It didn't happen.
"The consumer has not bounced back with the confidence that we were all looking for," Lundgren said at the Goldman Sachs Annual Retail Conference earlier this month, weeks after the company reported sluggish second-quarter sales.
Lundgren also said he doesn't expect things to get better in time for the holiday season.
Why would anyone be surprised by this news, I wonder? It was posted on the businessinsider.com Internet site at 1:25 p.m. EDT on Friday---and I thank Harry Grant for today's first story.
Bill Gross, the bond market's most renowned investor, quit Pimco for distant rival Janus Capital Group Inc on Friday, the day before he was expected to be fired from the huge investment firm he co-founded more than 40 years ago.
Gross, 70, had been clashing with the firm's executive committee and had threatened to resign multiple times, a source familiar with the situation said. The committee had planned to accept his latest resignation from the post of chief investment officer on Saturday.
The surprise development, which rattled the U.S. bond market, came the day before Pimco and its parent, German insurer Allianz SE, planned to dismiss Gross, the source said.
Gross will manage the Janus Global Unconstrained Bond Fund beginning on Monday, Janus said in a statement. The fund, started in May, has just $13 million in assets.
This Reuters article appeared on the ca.finance.yahoo.com Internet site yesterday sometime---and I thank Dr. Dave Janda for bringing it to my attention.
Bloomberg has a story today on the faltering of Draghi’s latest scheme to levitate Europe’s somnolent socialist economies by means of a new round of monetary juice called TLTRO—–$1.3 trillion in essentially zero cost four-year funding to European banks on the condition that they expand their business loan books. Using anecdotes from Spain, the piece perhaps inadvertently highlights all that is wrong with the entire central bank money printing regime that is now extirpating honest finance nearly everywhere in the world.
On the one hand, the initial round of TLTRO takedowns came in at only $100 billion compared to the $200 billion widely expected. It seems that Spanish banks, like their counterparts elsewhere in Europe, are finding virtually no demand among small and medium businesses for new loans.
Many small and medium-sized businesses are wary of the offers from banks as European Central Bank President Draghi prepares to pump more cash into the financial system to boost prices and spur growth. The reticence in Spain suggests demand for credit may be as much of a problem as the supply.
The monthly flow of new loans of as much as 1 million euros for as much as a year — a type of credit typically used by small and medium-sized companies — is still down by two-thirds in Spain from a 2007 peak, according to Bank of Spain data.
On the other hand, Spain’s sovereign debt has rallied to what are truly stupid heights—with the 10-year bond hitting a 2.11% yield yesterday (compared to 7% + just 24 months ago). The explanation for these parallel developments is that the hedge fund speculators in peripheral sovereign debt do not care about actual expansion of the Spanish or euro area economies that is implicit in Draghi’s targeted promotion of business lending (whether healthy and sustainable, or not). They are simply braying that “T” for targeted LTRO is not enough; they demand outright sovereign debt purchases by the ECB—-that is, Bernanke style QE and are quite sure they will get it. That’s why they are front-running the ECB and buying the Spanish bond. It is a patented formula and hedge fund speculators have been riding it to fabulous riches for many years now.
This commentary, with some excellent charts, showed up on David's website on Friday someday---and it's the first offering of the day from Roy Stephens.
Heightened global market instability has began to be transmitted to U.S. securities markets.
There’s much that we simply don’t know. There is as well a lot we know with an important degree of confidence.
Some months back I highlighted an exceptional Bank of America Merrill Lynch research report, “Pig in the Python – the EM Carry Trade Unwind” (Ajay Singh Kapur, Ritesh Samadhiya and Umesha de Silva). Especially in light of recent market developments, it’s a good time to revisit this thesis and highlight some of their data.
From “Pig in the Python,” February 2014: “Since 3Q2008, the US Federal Reserve QE has unleashed a massive $2 TN debt-driven carry trade into emerging markets, disproportionately increasing their forex reserves (by $2.7 TN from end-3Q 2008), their monetary bases (by $3.2 TN), their credit and monetary aggregates (M2 up by $14.9 TN), consequently boosting economic growth and asset prices (mainly property and bonds). As the Fed continues to taper its heterodox policy, we believe these large carry trades are likely to diminish, or be unwound.”
Doug's must read commentary showed up on the prudentbear.com Internet site on Friday evening---and it's courtesy of reader U.D.
Barely a year removed from the devastation of the 2008 financial crisis, the president of the Federal Reserve Bank of New York faced a crossroads. Congress had set its sights on reform. The biggest banks in the nation had shown that their failure could threaten the entire financial system. Lawmakers wanted new safeguards.
The Federal Reserve, and, by dint of its location off Wall Street, the New York Fed, was the logical choice to head the effort. Except it had failed miserably in catching the meltdown.
New York Fed President William Dudley had to answer two questions quickly: Why had his institution blown it, and how could it do better? So he called in an outsider, a Columbia University finance professor named David Beim, and granted him unlimited access to investigate. In exchange, the results would remain secret.
After interviews with dozens of New York Fed employees, Beim learned something that surprised even him. The most daunting obstacle the New York Fed faced in overseeing the nation's biggest financial institutions was its own culture. The New York Fed had become too risk-averse and deferential to the banks it supervised. Its examiners feared contradicting bosses, who too often forced their findings into an institutional consensus that watered down much of what they did.
This story went viral the moment it got posted on the Internet yesterday. This version, which is a must read, appeared on the propublica.org Internet site at 5 a.m. EDT on Friday morning---and I found it in a GATA release.
There are three other versions that were sent to me. The original Bloomberg story headlined "The Secret Goldman Sachs Tapes" was written by Michael Lewis of "Flash Boys" fame---and it's a must read as well. I thank Roy Stephens for sending that version. Zero Hedge couldn't help themselves---and their take on it is headlined "How Goldman Controls the New York Fed: 47.5 Hours of "The Secret Goldman Sachs Tapes" Explain"---and this commentary is courtesy of reader 'David in California'. The New York Post also jumped into the fray with an article entitled "Tapes showing meek oversight of Goldman are about to rock Wall Street"---and this one is courtesy of reader Brad Robertson.
Alex was the dinner speaker last Saturday night at the Casey Summit in San Antonio---and his speech, along with the zeal with which it was delivered, received decidedly mixed reviews.
But here he is in an interview with Doug Casey. It was posted on the youtube.com Internet site yesterday sometime. It's a 2-part interview---and the first installment starts at the 2:35 minute mark and runs until the 17:30 minute mark. Then, after a five minute break/commercial, the interview starts again at the 22:40 minute mark---and ends at 43:10.
I've had no time to watch it as of yet, but it will be in the pile of things I have to read/listen to, before the weekend is done.
A whistleblower of HSBC fraud has denounced the bank’s chairman, Douglas Flint, as “an extraordinary hypocrite” following the financier’s suggestion that those who expose crime in Britain’s financial services sector should be rewarded and celebrated.
Flint made the comment at the launch of Britain’s Chartered Institute for Securities & Investment’s (CISI) “Speak Up” initiative launched on Tuesday. The program was set up to encourage financial services firms to adopt a policy that assists staff in reporting legislative, regulatory and company policy violations.
Calling on U.K. financial firms to take a more proactive approach to tackling misconduct in the workplace, Flint said firms should “encourag[e] the calling out of both good and bad behaviour” and reward and praise “those who escalate their concerns even if they are sometimes wrong”.
But HSBC whistleblower and financial campaigner Nicholas Wilson condemned Flint’s comments, insisting they were disingenuous. In an exclusive interview, Wilson told RT he had attempted to expose fraud in HSBC for years, yet Flint had turned a blind eye.
This article appeared on the Russia Today website at 1:14 p.m. Moscow time on their Thursday afternoon---and I thank Harry Grant for sending it our way.
Six banks have entered settlement discussions with the U.K.'s main markets regulator over the alleged manipulation of foreign exchange in what could amount to record fines.
Each of the banks -- Barclays, Citigroup, HSBC, JPMorgan Chase, Royal Bank of Scotland, and UBS -- are facing fines in the hundreds of millions of pounds from the Financial Conduct Authority, according to people familiar with the situation.
The settlement talks, which typically last eight weeks, are only with the FCA and do not include the United States or any other domestic regulator.
This Financial Times story showed up on their website yesterday sometime---and it's posted in the clear in this GATA release.
Trilateral natural gas talks Friday in Berlin have resulted in temporary relief for Ukraine, delegates at the conference confirmed.
Russian, Ukrainian and European officials met in Berlin in an effort to avert a gas crisis for the upcoming winter.
Russia meets about a quarter of the gas needs for Europe, though the bulk of that volume runs through the Soviet-era transit system in Ukraine. Contractual woes in 2006 and 2009 forced Russian gas company Gazprom to cut gas supplies through Ukraine and European leaders are worried about a repeat of the crisis given ongoing acrimony between Kiev and Moscow.
The original headline to this UPI story, filed from Berlin yesterday, read "Ukraine, Europe, Russia make progress in gas talks"---and it's another contribution from Roy Stephens.
U.S. actions in Ukraine should be classified not only as hostile with regard to Russia, but also as targeting global destabilization. The U.S. is essentially provoking an international conflict to salvage its geopolitical, financial, and economic authority. The response must be systemic and comprehensive, aimed at exposing and ending U.S. political domination, and, most importantly, at undermining U.S. military-political power based on the printing of dollars as a global currency.
The world needs a coalition of sound forces advocating stability —in essence, a global anti-war coalition with a positive plan for rearranging the international financial and economic architecture on the principles of mutual benefit, fairness, and respect for national sovereignty.
CURBING THE ARBITRARINESS OF RESERVE CURRENCY ISSUERS
This coalition could be comprised of large independent states (BRICS); the developing world (most of Asia, Africa, and Latin America), which has been discriminated against in the current global financial and economic system; CIS countries interested in balanced development without conflicts; and those European nations not prepared to obey the disparaging U.S. diktat. The coalition should take measures to eliminate the fundamental causes of the global crisis.
Sergei Glaziev is an Advisor to the President of the Russian Federation---and a Full Member of the Russian Academy of Sciences. This commentary of his showed up on the globalaffairs.ru Internet site on Tuesday---and it's certainly worth reading. I thank Roy Stephens for sharing it with us.
The British parliament voted overwhelmingly on Friday to join a U.S.-led coalition against the Islamic State militant group. Belgium and Denmark also announced that they would join the international effort against the jihadists.
British lawmakers voted 524 to 43 in favour of military action, paving the way for the Royal Air Force to immediately join strikes targeting the Islamic State (IS) group, also known as ISIS or ISIL.
The vote came after Prime Minister David Cameron recalled parliament from recess to back military action following an official request from the Iraqi government.
This article appeared on the france24.com Internet site early this morning Europe time--and I thank Roy Stephens for his final offering in today's column.
1. Andrew Maguire [#1]: "Stunning 650 Tonnes of Gold Bought in Takedown" 2. Ronald-Peter Stoferle: "Concerned About the Gold and Silver Smash - Just Read This" 3. Andrew Maguire [#2]: "Final Stages of Historic Capitulation in Gold and Silver"
[Note: Besides my usual disclaimer on our daily dose of hyperbole out of King World News that's posted below---I, and others, have some real issues with this 650 tonne figure---and here are just two of them. This amount of gold represents almost 80 percent of the current contents of the GLD ETF---and 25 percent of yearly gold production. Considering the fact that the goings-on inside the LBMA are totally opaque, I'd like to see some proof for what appears to be an outlandish claim. - Ed]
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
The market for precious metals is not as big as you might think.
One year's worth of mined platinum is only the size of a car. But it's worth about $8 billion.
Visual Capitalist took one year's production of eight commodities, lumped each of them into a three-dimensional cubes, and put them next to landmarks around the world.
They also calculated the value of each cube.
Wow! Talk about a reality check! This short, but truly amazing photo essay showed up on the businessinsider.com Internet site at 4:49 p.m. EDT on Thursday afternoon---and it's an absolute must read. I was amazed---and you will be too!!! I thank reader Harry Grant for his third offering in today's column.
For years the Royal Mint has sold collectible coins commemorating special events direct to the public.
But "bullion" coins made for investment purposes – such as Sovereigns, Britannias or Lunars (introduced last year) – have until now been available only through dealers.
Bullion coins are generally produced to a less perfect finish than special-edition coins made for collectors. This means their price tracks more precisely the value of the gold they contain. By comparison, collectable coins typically go on sale – initially at least – for substantially more than the value of the gold they contain.
From this week the Royal Mint offers a bullion-coin service through which individuals can buy as few as one coin at a time directly. Buyers create an online account and buy coins via the Mint’s website, where prices change constantly according to the gold market.
Once the transaction is complete the Mint dispatches the coins in insured mail which – for a "limited time" – is free within Britain.
This interesting essay appeared on the telegraph.co.uk Internet site at 8:14 a.m. BST on their Friday morning---and it's an article I found on the gata.org Internet site.
Suppressed prices for gold and silver are obviously considered buying rates by German investors. The German precious metals trade reports a surge in sales.
“For about a week we record considerably increased turnover again, which is now on previous year’s level, so it doubled compared to the recent months.”, Rene Lehman from the internet dealer Münzland in Dresden told Goldreporter.
“We can confirm that customer demand has considerably increased in the recent days.“, said Dominik Kochmann, CEO of ESG Edelmetalle in Rheinstetten.
Daniel Marburger, Director of Coininvest GmbH in Frankfurt/Main also stated that "In the past seven working days we have seen an extreme surge in demand."
Well, dear reader, as I said further up in today's column, bullion demand here in Edmonton---especially silver---has really taken flight at our store this week as well. And since JPMorgan et al have put it on sale below the cost of production---why the hell not!!! And that is investment advice---and the buyers have figured that out all by themselves! This news item was posted on the German website goldreporter.de early yesterday evening Europe time---and I found it embedded in a GATA release.
It would appear to us that the factors that would make gold a safe-haven asset have not gone away.
In fact these factors are strengthening, as described above. The only rational explanation appears to be that gold remains an investment safe-haven as it has always done, but that this is not yet being recognised by the price discovery process in the market.
Adding in the fact that there is a continued disconnect between, on the one hand, the global physical gold market primarily driven out of China and India, and on the other hand, the New York gold futures market and unallocated London bullion market on the other hand, then this disconnect should not be expected to persist over the medium term.
This is especially the case given the heightened geopolitical and macroeconomic risks.
With the gold price not yet signalling the geopolitical and macroeconomic alarm bells that many would have expected it to, the question of gold price manipulation remains a valid question.
This must read commentary appeared on the Irish website goldcore.com on Friday. It also showed up in a GATA release as well.
Defeating markets is the primary objective of central banking, GoldMoney research director Alasdair Macleod writes today, adding that it will come at the expense of hyperinflation, since debt is so overwhelming that interest rates, while already at zero, cannot be raised without collapsing the world economy.
Macleod's analysis is headlined "Valuing Gold and Turkey Farming" and it was posted on the goldmoney.com Internet site on Friday. I found it posted on the gata.org Internet site yesterday---and it's worth reading.
In the first installment of his review of the operations of the new Shanghai International Gold Exchange in Shanghai's free-trade zone, gold researcher and GATA consultant Koos Jansen writes, among other things, that the exchange seems designed to discourage export of gold from China.
Jansen's analysis is headlined "The Workings of the Shanghai International Gold Exchange, Part 1" and it's posted at the Singapore Internet site bullionstar.com early Thursday evening local time. I found this gold-related story on the gata.org Internet site yesterday. It's long---and a bit thick, but worth your while. I stole 'all of the above' from another GATA release.
Reported Hong Kong net exports of gold to mainland China were again at an extremely low level in August at a mere 21.1 tonnes. In previous years the Hong Kong figures have been taken by global gold analysts as something of a proxy for total Chinese gold imports, even though gold was known to have entered the Chinese mainland by other routes, but this had been assumed to be in relatively insignificant quantities. This year, though, China has eased the path to passage of gold through other ports of entry – notably Shanghai and Beijing – for which no data is forthcoming and given that this easing coincides with the apparent downturn in the Hong Kong figures, it could well be the case that imports via these alternative routes have been replacing gold which had previously come in via Hong Kong.
On the face of things, if one takes the Hong Kong figures for net gold exports to China alone (see table below), Chinese demand appears to have fallen by a massive 33% this year from 725 tonnes to 485 tonnes. But this is belied by figures for withdrawals from the Shanghai Gold Exchange which are only down by around half this percentage, and which have been particularly strong in the past few weeks. This has also coincided with price premiums over the London gold price again appearing in Shanghai.
This commentary by Lawrie was posted on the mineweb.com Internet site yesterday sometime---and it's also worth reading.
The Federal Reserve has built a $2.7 trillion time bomb that will cause economic mayhem if not carefully diffused, says Robert Auerbach, a professor of public affairs at the University of Texas at Austin.
Although the Fed has pumped trillions of dollars into the economy since 2008, most of it has remained idle in the form of private bank's excess reserves it continues to hold, he writes in an article for The Huffington Post.
Excess reserves exploded under the former Fed Chairman Ben Bernanke and have continued soaring under current Chair Janet Yellen, from $1.6 billion in August 2008 — almost nothing in central bank terms — to $2.7 trillion as of Sept. 4, notes Auerbach, a former economist with the House Financial Services Committee, the U.S. Treasury's Office of Domestic Monetary Affairs and the Fed.
There's nothing really new here, but it's nice to be reminded that this potential inflationary bombshell still hangs over the market. I doubt very much that interest rates on these excess reserves will be removed, as the interest created out of thin air on the excess reserves created out of thin air, are being used to recapitalize the banking system. This news item appeared on the moneynews.com Internet site at 8:04 a.m. EDT on Thursday---and today's first story is courtesy of West Virginia reader Elliot Simon.
Looking ahead to GDP data on Friday, with Jim Grant, founder and editor of Grant's Interest Rate Observer. Grant outlines the risks to the U.S. economy.
This 1:53 minute video clip appeared on the cnbc.com Internet site at 3 p.m. yesterday afternoon---and its courtesy of reader Ken Hurt.
Americans have a bleak view of the economy and their own financial situations, according to a new study from the Public Religion Research Institute.
While the Great Recession officially ended in June 2009, only 21 percent of Americans believe it's really over, while 72 percent believe it continues.
Only 7 percent of Americans report they are in excellent shape financially, while 34 percent say they're in good shape, 37 percent say they're in fair shape, and 20 percent say they're in poor shape.
Just 30 percent believe the economy has improved during the past two years, while 35 percent say it has worsened, and 33 percent say it is about the same.
This article put in an appearance on the moneynews.com Internet site at 8:20 a.m. EDT on Thursday morning---and it's the first offering of the day from Elliot Simon.
Eric Holder Jr., the nation's first black U.S. attorney general, is preparing to announce his resignation Thursday after a tumultuous tenure marked by civil rights advances, national security threats, reforms to the criminal justice system and five and a half years of fights with Republicans in Congress.
Two sources familiar with the decision tell NPR that Holder, 63, intends to leave the Justice Department as soon as his successor is confirmed, a process that could run through 2014 and even into next year. A former U.S. government official says Holder has been increasingly "adamant" about his desire to leave soon for fear he otherwise could be locked in to stay for much of the rest of President Obama's second term.
Holder already is one of the longest serving members of the Obama cabinet and ranks as the fourth longest tenured AG in history. Hundreds of employees waited in lines, stacked three rows deep, for his return in early February 2009 to the Justice Department, where he previously worked as a young corruption prosecutor and as deputy attorney general — the second in command — during the Clinton administration.
This NPR news item showed up on the Zero Hedge website yesterday---and it's courtesy of reader 'David in California'.
Iraq's prime minister said Thursday that captive militants for the Islamic State of Iraq and Syria (ISIS) told his intelligence agents of an alleged plot to attack subways in the United States and Paris.
U.S. law enforcement officials told CBS News they are investigating the threat, but as of overnight, there was still no intelligence on any credible specific plot against the U.S. A half-dozen French officials contacted by The Associated Press said they knew of no plot.
FBI Director James Comey told reporters Thursday afternoon that he was unaware of any threat directed at U.S. subways.
Not that I have a suspicious mind, but currents events in the Middle East are the perfect cover for the powers-that-be to drop another 9/11 event [or more than one] on the world. I found this CBS story from yesterday in a Zero Hedge piece---and it's the second article in a row from reader 'David in California'.
The foreign ministers of G7 countries stressed the importance of continuing trilateral talks between the European Union, Russia and Ukraine in a joint statement on Thursday.
"We welcome that the trilateral talks between Ukraine, Russia and the EU will continue. It is equally important to continue the discussions between Russia, Ukraine and the EU on resolving outstanding energy issues," reads the statement, released by the foreign ministers of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and High Representative of the European Union.
On September 12, Russia, Ukraine and the European Union held a trilateral meeting, which resulted in a compromise to put off the implementation of Kiev's free trade pact with the EU until December 2015.
This story is from the RIA Novosti website---and it was posted there just after midnight Moscow time on their Friday morning---and I thank Roy Stephens for his first of many contributions to today's column.
The European Union may begin discussions on lifting sanctions against Russia in October, and lifting the first block of sanctions is not probable before November, a European diplomatic source told ITAR-TASS on Friday.
The source said the de-sanctions' process may be organized only on the step-by-step basis depending on development of the situation in Ukraine.
The diplomat said about two possible ways of lifting sanctions, “where both are on the step-by-step basis, and lifting of the entire block at a time will not be possible.”
This story, filed from Brussels, showed up on the itar-tass.com Internet site on Friday morning Moscow time---and it's another contribution from Roy Stephens.
Russian energy companies feeling the squeeze from Western economic sanctions can appeal for help from the government, the deputy energy minister said Thursday.
Russia relies heavily on oil and natural gas revenues to support its economy. When sanctions targeting Russian energy companies went into force earlier this year, Andrei Belousov, an economic adviser to the Kremlin, said the Central Bank of Russia may sell some of its foreign currencies to blacklisted companies in an effort to offset the punitive measures.
Deputy Energy Minister Kirill Molodtsov said Thursday the federal government was on standby should sanctions-strapped companies need support.
"In a situation when the companies came under sanctions, they can appeal to the government for support, if there is such a need," he said.
This UPI story, filed from Moscow, appeared on their Internet site at 9:03 a.m. EDT yesterday morning---and I thank Roy Stephens for bringing it to our attention.
Next time you read about an auctioneer’s gavel coming down on a $150 million painting bought by some flunkey representing the ruling family of Qatar, don’t ooh or aah, but think of those monsters in Iraq and Syria who have their children pose on video while holding up the severed heads of innocents. And no, it’s not a stretch — without Qatar’s gold Islamic State would not exist, not even in the movies.
Let me put it another way: had Calvin Coolidge or Herbert Hoover given White House dinners for Al Capone, the outcry would have been heard all the way down to Patagonia. Yet, as reported in these here pages by Charles Moore, not only did the head of the family lunch with the Queen at Windsor, a cousin and his mother also lunched the next day at Windsor and caused a stir because they were not included in the Queen’s carriage. They sponsored Ascot this year, and Elizabeth Anson was their PR person. She burst into tears after failing to include them in the lead carriage. All I can say is shame on Ascot, more shame on Anson, and eternal shame on the stuffed shirts who forced the Queen to break bread with these characters.
They say Brits will do anything for money, but the rest of the Western world is just as bad. Just look at how a tiny Gulf nation of 250,000 goatherds managed to land the World Cup in 2022. To call the bribes Qatar must have paid to Fifa delegates colossal would be an understatement. But forget the 50-degree-Celsius heat and that football is unplayable in that hellhole, the scandal of modern-day slavery as practised by the Qataris is a far bigger depravity, overlooked by the West. In fact, calling foreign workers indentured servants is a euphemism; they are modern-day slaves. Foreign workers do not enjoy a minimum wage in Qatar, nor do they have any rights. They are not allowed to change jobs, however feudal the conditions, get a driving licence, rent a room or open a checking account unless they have their employer’s permission. Thousands have died while working in appalling conditions (hundreds of Nepalese alone), which provoked an investigation by the Norway-based Global Network for Rights and Development, which sent a researcher and a photographer. Last week the Qatari government confirmed that the two have been arrested and are in prison. So much for European influence in that sweaty hellhole.
This very interesting article appeared on the spectator.co.uk Internet site on Sunday---and I thank South African reader B.V. for sharing it with us.
Folks, this war is only three days old and its already a gong show. Its become at least a four-front affair—with Obama’s “broad” coalition amounting to little more than a few stealth Arab nations renting back to Washington the equipment and American trained pilots it had earlier provided them.
The President’s shock-but-not-awe campaign apparently incepted not with bombs on the Islamic State’s capital of Raqqah but via a tomahawk barrage on some Nusra Front rebels in northwestern Syria. These were anti-regime fighters of the not-so-moderate persuasion who had been recently driven there after a bloody struggle with ISIS. As explained by the WSJ:
In July, the Islamic State routed its rivals including the Nusra Front and allied Islamist rebels from eastern Syria and they are now concentrated in the western half of the country, where they are fighting the regime along with other factions.
So these folks were fighting both of Washington’s declared enemies—–the Assad regime and ISIS—but it obliterated them anyway, and some of their women and children, too. That apparently makes for a three-front war, as the WSJ further explained---
This long commentary by David Stockman appeared on his website on Thursday sometime---and I thank reader U.D. for passing it around.
The Ukrainian government could not provide a concrete schedule when international experts could enter the Boeing crash site in eastern Ukraine, Malaysian Prime Minister Najib Razak said after meeting with his Ukrainian counterpart Arseniy Yatsenyuk in New York.
“Kiev cannot give us any guarantees, including on the date of access, and we have to depend on them. According to Yatsenyuk, armed clashes still continue in the area, that’s why it is impossible to get to the crash site,” Mr. Najib said on Wednesday.
Asked whether Malaysia could initiate talks with self-defense militias to allow safe passage of the team, Najib said a “communication line” is still open but Kiev’s sensitivity should be taken into consideration.
The Malaysian prime minister stressed that international experts should get to the site ahead of the winter season that could affect the forensic evidence. He also expressed concerns over unclaimed remains of passengers and the crew of the crashed plane.
This RIA Novosti article appeared on their website at 10:40 a.m. Moscow time on their Thursday morning---and it's another story courtesy of Roy Stephens.
Japanese Prime Minister Shinzo Abe confirmed early Friday he still hoped to meet with Russian President Vladimir Putin, although no date had been set for Putin's visit to the island nation yet.
"As for Vladimir Putin's visit to Japan, I do hope that it will take place, although his agenda is still to be set," Shinzo Abe said at a press conference.
"We had a phone talk [with Putin] on my birthday, September 21. We agreed to continue a dialogue between our nations," Abe told journalists.
This short article appeared on the RIA Novosti website at 4:16 a.m. Moscow time this morning, which was 8:16 p.m. Thursday evening in New York---and it's the final offering of the day from Roy Stephens.
1. Bill Haynes: "Stunning Demand" One Individual Buying $40 Million of Gold 2. Egon von Greyerz: "Global Market Collapse and Wealth Destruction is Now Upon Us" 3. John Hathaway: "Absolutely Stunning Developments in Gold"
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
Goldman Sachs Group Inc.’s Jeffrey Currie says the worst isn’t over yet for gold after prices erased almost all of this year’s gain.
“Risks are significantly skewed to the downside,” said Currie, who told investors to sell last year before gold’s biggest collapse since 1980. “Much of the support was coming from political uncertainty in Ukraine and what was going on in Middle East,” and those concerns have faded, he said in a telephone interview yesterday.
After bullion’s rally in the first half of the year beat gains for commodities, equities and Treasuries, the metal is heading for its first quarterly decline in 2014. Demand for precious metals as a protection of wealth has been eroded by the outlook for a strengthening U.S. economy, which helped spark a rally in the dollar as the Standard & Poor’s 500 Index of equities surged to a record this month.
With bulls hit stories like this, you'd think that Currie's hand has to be shaking a little when he reaches for his paycheque/paycheck. Like John Hathaway and many others, Jeffrey Currie will never talk about the real reason why precious metal prices are in the dumps, even though they all know better. This Bloomberg story, filed from New York, was posted on their Internet site at 6:38 a.m. Denver time on Thursday morning---and I found it on the Sharps Pixley website.
Traders who manipulate key oil, gold and currency benchmarks will be handed the same huge fines or jail sentences as those who rig Libor under government proposals to tackle market abuse.
The Treasury launched a formal consultation on Thursday to extend the new legislation to cover the foreign exchange, fixed income and commodity markets. Under the proposals, the legislation would cover the London Gold Fixing and the LMBA Silver Price, which determine the price of the precious metals in the London market.
Also targeted is the ICE Brent futures contract, "which acts as the crude oil futures market's principal financial benchmark", the Treasury said.
“The integrity of the City matters to the economy of Britain. Ensuring that the key rates that underpin financial markets are robust, and that anyone who seeks to manipulate them is subject to the full force of the law is vital," said Andrea Leadsom, economic secretary to the Treasury.
That's all very cute, but as I've said before---and in my presentation at the Casey Summit on Sunday---it's not the fixes that matter, it's the bias between the morning and afternoon gold fix. It has been negative every year since 1975. I'll have a chart on this in The Wrap section. This story appeared on the telegraph.co.uk Internet site at 11:13 a.m. BST on their Thursday morning---and I thank reader "Roger in La La Land" for sending it along. Phil Barlett sent us the Bloomberg take on this. It's headlined "U.K. Seeks to Criminalize Manipulation of 7 Benchmarks".
The London Bullion Market Association (LBMA) said on Thursday it appointed Citigroup as a market maker, underscoring the bank's ambitions to expand into the precious metals sector while others are exiting due to regulatory concerns.
LBMA said it named Citibank, a unit of Citigroup, as a spot market-making member effective Thursday. Currently, LBMA has 12 market makers that serve in either one, two, or all three of the spot, forwards, and options markets. They make markets by quoting two-way prices in both gold and silver products to other market makers.
This just exchanges one crook for another. Exit Deutsche Bank---enter Citibank. Please move along, nothing to see here. This Reuters story, filed from New York, appeared on their Internet site at 3:40 p.m. EDT yesterday---and I found it on the gata.org Internet site.
In this video, Mike explains the mechanics behind what he sees coming: short term deflation followed by big or even hyperinflation as central banks try to print their way out of the mess they have created. The result is the same as it has always been throughout history, with gold delivering either a technical knockout or a complete decimation of currency.
No surprises here, as many analysts, including myself---have been discussing this for years. It's just the timing that remains unknown. This 9:02 minute video clip was posted on the youtube.com Internet site on Wednesday---and it's certainly worth your time.
With local gold prices dipping below the 140 dirhams a gram (for 22-karat) level for the first time this year, it was enough to unleash a manic round of buying at jewellery stores in the United Arab Emirates and the Gulf over the weekend. If the current levels -- of around Dh140 -- can sustain itself, it could lead to a surge in buying ahead of the key festivals of Eid and Diwali next month, industry sources say.
Industry feedback suggests that on Friday itself nearly 1.5 tonnes of gold could have been bought at retail level transactions across the Gulf, with the UAE accounting for nearly half of that. On Monday, with the price at Dh139.25 a gram, the level of consumer interest was sustained.
"The month with Diwali" -- the Indian festival when buying jewellery is rated as auspicious -- "represents a peak buying period for the trade in the Gulf, and this year it's doubly so with Eid also falling in the same month," said Shamlal Ahmad, director of International Operations at Malabar Gold & Diamonds. "Shoppers are clearly bringing forward their purchases to make use of the soft prices."
This positive gold-related story, filed from Dubai, appeared on the gulfnews.com Internet site at 5:31 p.m. local time on their Wednesday afternoon---and it's definitely worth reading. I found it embedded in a GATA release yesterday.
As the price of precious metals that is eschewed daily by status-quo-hugging talking-heads on business media as indicative of the days of hard money being over continues to come under 'pressure', demand for physical gold remains extremely high. With India's festive season about to begin, The Hindustan Times reports a massive surge in gold smuggling in the last 10 days as heavy demand for gold during Dussehra (for which booking and supply starts today when Navratri begins) has dragged 50 tonnes of gold across the borders to avoid the government's capital controls. As Bloomberg adds, physical gold premiums may double by the end of October.
This is really two stories in one, so you can pick and chose, or read both of them---and they're both worth you while. It was posted on the Zero Hedge Internet site at 9:11 a.m. EDT on Thursday morning---and I thank reader M.A. for finding it for us.
Latest official gold reserve data from the International Monetary Fund (IMF) shows that Russia again added to its gold reserves in August, with the Central bank of the Russian Federation purchasing 232,510 ozs (7.23 tonnes) and bringing its total gold reserves to 35.769 million ozs or 1,112.5 tonnes.
Likewise, the National Bank of Kazakhstan purchased a massive 795,213 ozs or 24.7 tonnes in August bringing its total gold reserves to 5.848 million ozs (181.9 tonnes).
Turkey was also a gold buyer in August and the Turkish central bank adding 96,783 ozs (3 tonnes) to bring its total official gold reserves to 16.45 million ozs (511.6 tonnes), which is the world's 12th largest official gold holding.
According to the IMF data, other countries which added to their gold reserves in August included the central banks of Azerbaijan and Ukraine.
This commentary was posted over at the goldcore.com Internet site yesterday---and its definitely worth reading.
The New York Stock Exchange publishes end-of-month data for margin debt on the NYXdata website, where we can also find historical data back to 1959. Let's examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter.
Unfortunately, the NYSE margin debt data is about a month old when it is published. Following its February peak, real margin declined sharply for two months, -3.9% in March -3.2% in April and was flat in May. It then jumped 5.7% in June, its largest gain in 17 months. June saw a 0.9% decline, but the August number has drifted higher, up 0.6%, and is now only is 1.9% below the February peak.
This article, with three excellent charts, appeared on the businessinsider.com Internet site at 3:37 p.m. EDT on Wednesday afternoon---and today's first story is courtesy of reader U.D.
The United States has evolved into a nation with a Ponzi economy, in which the continuous expansion of debt is the only thing that keeps prosperity alive, according to Federal Reserve critic John Hussman.
In his weekly commentary, Hussman, founder of the eponymous Hussman Funds family of mutual funds, said the U.S. economy appears fine on the surface, but that capital accumulation and labor force participation have buckled below – with dire prospects for the American future.
"Over time, growth in the standard of living is chained to and limited by growth in productivity," he wrote.
"When the most persistent, most aggressive and most sizable actions of policymakers are those that discourage saving, promote debt-financed consumption and encourage the diversion of scarce savings to yield-seeking financial speculation rather than productive investment, the backbone that supports a rising standard of living is broken."
This excellent article showed up on the moneynews.com Internet site at 7:01 a.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for sharing it with us.
Among the many evils of monetary central planning is the conceit that 12 members of the FOMC can tweak the performance of a $17 trillion economy on virtually a month to month basis—using the crude tools of interest rate pegging and word cloud emissions (i.e. “verbal guidance”). Read the FOMC meeting minutes or the actual transcripts (with a five-year release lag) and they sound like an economic weather report. Unlike the TV weathermen, however, our monetary politburo actually endeavors to control the economic climate for the period immediately ahead.
Accordingly, the Fed is preoccupied with utterly transient and frequently revised-away monthly release data on retail sales, housing starts, auto production, business investment, employment, inflation and the like. But its always about the latest ticks in the data—never about the larger patterns and the deeper longer-term trends.
And of course that’s the essence of the Keynesian affliction. The denizens of the Eccles Building—-overwhelmingly academics and policy apparatchiks—-rarely venture into the blooming, buzzing messiness of the real economic world. They simplistically believe, therefore, that the US economy is just a giant bathtub that must the filled to the brim with “aggregate demand” and all will be well.
This longish essay by David appeared on this Internet site yesterday sometime---and I thank Roy Stephens for his first offering of the day.
"Let me assure you the U.S. will always pay its debt. How do I know that? If you borrow money from the United States you get a piece of paper, a bond. And what does the paper say? We promise to pay, say a thousand dollars. How do I know the United States could always pay that? Because they just print those dollars. You know, you can imagine a temporary shortage of electricity and the printing press didn't work but apart from that it is inconceivable that we would not... we promise to pay you these little pieces of paper, you were foolish enough to accept that promise, and we will deliver those pieces of paper. But Greece can't deliver those pieces of paper. When it borrowed in drachma it could deliver those pieces of paper called drachma. But now it promises to pay in euros and it doesn't control the printing of the euros. That's done from Frankfurt. And so they can't get access to those euros. So in essence the euro created the potential for sovereign debt crises in Europe. A problem that had not been there before." - Joseph Stiglitz, The Future of Europe, UBS International Center of Economics in Society, University of Zurich, Basel, January 27, 2014
The arrogance of this little twerp is evident in the contempt he holds the audience as he says these words---and the link to that video, along with a few other choice quotes of his, were posted at the mikenormaneconomics.blogspot.de Internet site on Tuesday---and my thanks go out to Michael Cheverton for bringing it to our attention. It's worth your time.
On Day Two of the Casey Research Summit in San Antonio, the emphasis was decidedly on the “deep state,” as Doug Casey termed it: what it is, what it’s doing, and how to thrive despite its ubiquitous reach.
The deep state begins with government, an institution Doug describes as intrinsically evil and destructive. That’s because it’s empowered by enforced coercion—one of only two ways in which humans interact with one another (the alternative being voluntary co-operation).
But the deep state is more. It’s not only the massive, prying, regulating apparatus of the federal government, but also the corporate structure that depends on government largess, and the lapdogs in the media and academic community that serve to perpetuate its message. All of these elements are held together with money and propaganda, and they combine to deny the vast majority of citizens true freedom.
Doug described America’s “top dogs”—a few thousand elites who all know each other. They went to the same schools, belong to the same clubs, socialize amongst themselves, and scratch each other’s backs. No conspiracy needed. They all know exactly what to do to maintain their position without being told. It’s a closed party, and as Doug said, “We ain’t invited.”
This short commentary on Doug's speech was written by Doug Hornig---and was posted on the Casey Research website yesterday---and is worth reading.
Barclays Plc was fined twice in one day for client account failures in the U.K. and the U.S., hurting the bank’s effort to rehabilitate a tarnished image. It agreed to pay a total of $77 million in penalties.
The bank will pay $15 million to the Securities and Exchange Commission to settle claims that its U.S. wealth-management business failed to maintain an adequate internal compliance system and made trades and charged commissions without client approval.
In the U.K., Barclays agreed to pay 38 million pounds ($62 million) to Britain’s market regulator for failing to properly protect 16.5 billion pounds of client assets between 2007 and 2012. Flaws in account naming or data suggested assets belonged to Barclays instead of its clients, which could have caused customers to lose money if the bank became insolvent, the Financial Conduct Authority said.
Once a crook---always a crook! This Bloomberg news item appeared on their website at 5 p.m. Denver time on Tuesday afternoon---and it's the second contribution of the day from Elliot Simon.
France’s famously generous employment rights could be a thing of the past if radical new proposals unveiled by business leaders are adopted, though fierce opposition from politicians and trade unions are likely to prevent that from happening.
Employers’ association Medef announced its proposals, which it said will help create one million new jobs over five years, in a 100-page document on Wednesday, though details had already been leaked to the press earlier this month.
They include plans to reduce the number of public holidays, relax minimum wage laws and alter France’s historic 35-hour working week law to allow employees at certain companies to work longer hours without receiving overtime payments.
These drastic changes are needed if France is to revive its flagging economy and tackle its pressing unemployment problem, the report says – the latest figures put the number of jobless in France at a record high of almost 3.5 million as of July, an 0.8 percent increase on the month before and the ninth consecutive monthly rise.
This article appeared on the france24.com Internet site yesterday yesterday---and I thank South African reader B.V. for finding it for us.
The stunning rise of Germany’s anti-euro party threatens to paralyse efforts to hold the eurozone together and may undermine any quantitative easing by the European Central Bank, Standard & Poor’s has warned.
Alternative für Deutschland (AfD) has swept through Germany like a tornado, winning 12.6pc of the vote in Brandenburg and 10.6pc in Thuringia a week ago. The party has broken into three regional assemblies, after gaining its first platform in Strasbourg with seven euro-MPs.
The rating agency said AfD’s sudden surge has become a credit headache for the whole eurozone, forcing Chancellor Angela Merkel to take a tougher line in European politics and risking an entirely new phase of the crisis. “Until recently, no openly Eurosceptic party in Germany has been able to galvanise opponents of European 'bail-outs’. But this comfortable position now appears to have come to an end,” it said.
This Ambrose Evans-Pritchard story showed up on the telegraph.co.uk Internet site at 9:50 p.m. BST on their Tuesday evening---and the first reader through the door with this story yesterday was Roy Stephens.
An extended period of calm on the bond markets has led many to conclude the euro crisis is over. But German central bank head Jens Weidmann says in an interview that the coast still isn't clear and that there is still great need for reforms.
SPIEGEL: Mr. Weidmann, you are notorious for being a tough critic of European Central Bank President Mario Draghi. But the euro crisis seems to be over, largely thanks to ECB intervention. Has he not been proven right?
Weidmann: It's not about being right or a personal confrontation. When it comes to extremely important monetary policy decisions, the ECB Governing Council does its utmost to find the correct path. And the decisions are so difficult because the crisis is not yet behind us, even if the current calm on the financial markets might suggest as much.
SPIEGEL: Yet Spain, once wracked by the euro-zone crisis, can today borrow money more cheaply than ever before in the history of the monetary union. Do you not think that is a consequence of Mario Draghi's 2012 pledge to save the euro "whatever it takes"?
This interview appeared on the German website spiegel.de at 1:00 p.m. Europe time yesterday afternoon---and it's another story courtesy of Roy Stephens.
Fugitive U.S. intelligence leaker Edward Snowden is one of the winners of the 2014 Right Livelihood Award, described as Sweden's "alternative Nobel prize".
He splits the honorary award with Alan Rusbridger, editor of U.K. newspaper The Guardian, which wrote extensively on government surveillance, based on his leaks.
Cash prizes went to three activists from Pakistan, Sri Lanka and the U.S.
Mr. Snowden's award seems to have caused embarrassment in Sweden.
This news item was posted on the bbc.com Internet site at 11:30 a.m. EDT on Wednesday---and this article is the second contribution of the day from reader B.V.
Following the U.S. President’s speech at the UN, Russian FM Sergey Lavrov was puzzled with Barack Obama’s ranking of international threats: deadly Ebola virus top, followed by so-called Russian aggression and ISIS in Syria and Iraq only third?
Gathered at the U.N. headquarters in New York, the world leaders attending the 69th General Assembly heard Barack Obama highlighting the three most significant global threats today.
“As we gather here, an outbreak of Ebola overwhelms public health systems in West Africa, and threatens to move rapidly across borders. Russian aggression in Europe recalls the days when large nations trampled small ones in pursuit of territorial ambition. The brutality of terrorists in Syria and Iraq forces us to look into the heart of darkness,” the U.S. leader said at the beginning of his statement.
Reacting to the speech, Russia’s Foreign Minister Sergey Lavrov spoke with astonishment.
This news story appeared on the Russia Today website at 7:47 p.m. Moscow time on their Wednesday evening, which was 1:47 p.m. EDT. Harry Grant beat Roy Stephens by 6 minutes on this story which arrived in my in-box at 11:47 p.m. last night.
Saudi pilots who conducted air strikes on jihadists in Syria received online death threats Wednesday after photos were published of those involved, among them a son of the crown prince.
The official Saudi Press Agency (SPA) released photographs of eight airmen it said were involved in Tuesday's US-led operation, carried out with Gulf allies.
In one picture they stood, some smiling, in green flight suits with arms around each other in front of one of their fighter jets.
One of the pilots involved in the raids is a son of Crown Prince Salman bin Abdul Aziz himself, according to Saudi newspapers.
This AFP article appeared on the france24.com Internet site at 4:05 p.m. Europe time yesterday afternoon---and I thank reader B.V. for bringing it to my attention, and now to yours.
We are currently in the midst of the largest ever Ebola outbreak in Western Africa, and this could just be the beginning. The number of cases and deaths has risen steadily, from a handful of people in Guinea at the end of March 2014 to several thousand now (Figure 1), not only in Guinea, but in Liberia, Sierra Leone, recently extending to Nigeria and the Democratic Republic of Congo (DRC).
A key metric to understand just how severe the epidemic can become is the basic reproductive rate, or R0, which measures the number of cases an infected patient generates while he is in his infectious period. A 2007 research paper by epidemiology experts at the “Université Pierre et Marie Curie” in Paris have found that Ebola has a R0 of about 2.7, which means the number of cases can multiply at a very fast pace. One of the key recommendations from the study is to implement control measures rapidly to prevent the spread of the epidemic. They say that increasing hospitalization rates significantly reduces the predicted epidemic size.
Unfortunately, the world’s response to this crisis has been nothing short of underwhelming; according to the World Health Organization (WHO), the seriousness of this Ebola crisis has been “underestimated” by authorities, meaning that they really have no idea of how many people are currently infected. More recently, the WHO declared that if left unchecked, the epidemic could affect over 20,000 people within 9 months. In reality, it could be even more given the historical R0 of the disease and the lack of proper health care infrastructure.
This eye-opening essay by Eric showed up on the sprott.com Internet site yesterday---and it's definitely worth reading.
In what is certainly the most important news of the day, The Wall Street Journal reports that China's long-serving central banker Zhou Xiaochuan, "the face of the Chinese economy to markets globally" is about to be given the boot.
According to the WSJ, "Chinese leader Xi Jinping is considering replacing Mr. Zhou, say party officials, as part of a wider personnel reshuffle that also comes after internal battles over economic reforms." And while it is true that at the age of 66, Zhou has passed China's retirement age, and his departure will be spun as an old man spending more time with his family, the reality is that this is part of a major Chinese shift in the "balance of power between reformist and reactionary forces, with the momentum for reforms being eroded by the loss of growth momentum in the economy," said Eswar Prasad, a Cornell University China expert.
Zhou's replacement: a career banker, who will do the bidding of, you guessed it, banks, which means "liquidity to the max." Per the WSJ, "The top contender to succeed Mr. Zhou at the People's Bank of China is Guo Shuqing, a former banker and top securities regulator who is currently governor of Shandong, a prosperous eastern province, the officials said."
This Zero Hedge article put in an appearance on their website at 11:12 a.m. EDT on Wednesday morning---and I thank reader 'David in California' for passing it around yesterday. It's longish, but worth skimming, at least until your eyes start to glaze over.
Jim's next speaking engagement after Alice Springs was at Casey Research's Summit in San Antonio. Surprisingly enough, I ran into Jim on the Alamo tour last Thursday afternoon---and he was jet lagged and pretty bagged. But after a good night's sleep, he was up up and at 'em as the opening speaker on Friday morning. I don't know how he does it.
This youtube.com video runs for 42:34 minutes---and it is, of course, courtesy of Harold Jacobsen.
1. Gerald Celente: "Increased Worldwide Danger to Rock Gold Market" 2. David P: "Despite Drop, Gold Coiled to Break $2,000 and Silver Above $70" 3. Jeffrey Saut: "Quote of the Week---and a Chart That Will Stun Global Readers"
The price of gold, down more than a third in three years, is approaching the tipping point where the mining industry would see a spike in the number of producers reducing output or even shutting down operations.
Several mines globally have already suspended output in the past 18 months, but not as many as industry watchers expected as producers focused on slashing costs and reworking mine plans to extract more profitable, higher-grade ounces.
But with bullion's slide this week to a nine-month low of $1,208.36 an ounce, those defenses may not be enough.
"$1,200 is a critical level. The industry has geared itself around $1,200," said Joseph Foster, portfolio manager at institutional investor Van Eck Global. "If it falls below that level, then there are a lot of mines around the world that are really going to struggle."
This Reuters article, filed from Vancouver, showed up on their website at 1:07 a.m. EDT this morning---and I thank reader Harry Grant for sliding it into my in-box just before midnight MDT last night.
The Royal Canadian Mint’s Gold Maple Leaf bullion coin is now available in a new one gram size. The coins are packaged into sets of 25 and referred to as the “Maplegram 25″ product.
“The Royal Canadian Mint always strives to innovate and diversify its products to offer customers new ways to own high-quality precious metals which set new standards for the global bullion industry,” said Marc Brûlé, Interim President and CEO of the Royal Canadian Mint. “The Mint’s new Maplegram25 product gives investors a novel way to purchase Gold Maple Leaf bullion coins in a highly liquid format that preserves and celebrates all the trademark qualities of the Maple Leaf brand.”
Because of their tiny size, I'm sure the premium over spot will be quite hefty. This is no way to buy gold bullion for investment purposes, so stay miles away from this product unless you just have to own one for its novelty value. This story appeared on the mintnewsblog.com Internet site yesterday sometime---and it's the final offering of the day from Elliot Simon.
*Cease fire in Ukraine holding, Putin is getting what he wants
*What is driving the current drop in the gold price, entry points?
*Proper portfolio allocation to gold
*Comprehensive review of gold price manipulation, techniques, and proofs
*Motives, players, tools
*The end game is in view, what is it?
John Ward interviews Jim in this audio podcast done on September 17 that was posted on the physicalgoldfund.com Internet site yesterday---and it's courtesy of Harold Jacobsen. It runs for just under 45 minutes, so it may be a good idea to pop the top off a cold one before you dig in. I borrowed the headline from the GATA release on this interview---and Chris Powell's introduction is worth the read as well. The link to that is here.